Depending on the school, program and province, post-secondary tuition can cost $2,500 to $8,000 a year, according to 2011 figures from the federal government. Residence costs can double or sometimes triple those figures.
The most basic step in paying for school is to invest in a Registered Education Savings Plan (RESP), says Alex Usher, president of Higher Education Strategy Associates of Toronto. This vehicle allows money set aside for post-secondary education to grow tax-free, much like an RRSP helps people save for retirement. Families can contribute up to $50,000 in an RESP for each child. Every dollar counts, as the Canada Education Savings Grant pays 20 per cent on the first $2,500 of contributions made every year. That's up to $500 a year in free money.
The next building block to pay for school is scholarships. Mr. Usher says two-thirds of first-year students receive some scholarship money, and 15 to 20 per cent receive extended funding.
Post-secondary institutions are only one source of scholarships. A wide range of associations, foundations, service clubs, and companies offer scholarships, fellowships and other financial assistance. Begin your quest at http://www.studentawards.com, a free service for Canadian students. A search engine matches potential awards to profile information that users provide when they register at the site. Over $70-million in awards are available, and only 54 per cent of scholarships in the database are merit-based.
Student loans and grants are two more pieces of the financing puzzle. Loans are designed to provide some measure of financial assistance, not to cover all of a student's post-secondary education costs.
Loans are based on the costs of school and the resources students have to pay for those costs (such as scholarships, job earnings, and money from parents). The federal government's CanLearn website, http://www.canlearn.ca, includes a parental contribution calculator to provide an idea of what's expected that parents will put towards education. An online calculator will also estimate of the amount of government loans that students may be eligible to receive. The website explains how and when to apply.
It never costs to apply for a loan, and as long as you have more costs than resources, you should get something, says Mr. Usher.
The federal source is the Canada Student Loans Program. In five provinces – B.C., Saskatchewan, Ontario, New Brunswick and Newfoundland – provincial and federal loans programs are integrated, so people apply in their province of residence. All other provinces and territories (except Yukon) offer stand-alone loans programs. While students apply to one place to receive financial assistance, they'll receive and manage two separate loans.
Normally, students who get loans receive one disbursement of money at the beginning of their first term, and one at the beginning of their second term. For most programs, students must apply every year to be considered for a loan.
Another financing option is grants, which unlike loans don't have to be repaid. Canada Student Grants are based on financial need (see the CanLearn website). For instance, they're available for students from low-income and middle-income families, students with dependents, and students with disabilities. All students who apply for a Canada Student Loan are automatically assessed for a grant, and students can qualify for both.
When do students need to repay loans? Only when they graduate or leave school, which is also when interest begins to apply. Payments aren't required until six months after that date. Students don't have to wait until the end of their academic career before repaying their loan. Any payments made while in school will go directly towards the principal of the loan, reducing the overall debt.
While scholarships, loans, grants and parental contributions can all make a huge dent in the cost of higher education, don't forget the impact of student employment. As Mr. Usher notes, working two evenings and a weekend day during the school year (maybe 15 hours a week) can generate just over $5,000 from a job that pays $10/hour. Work summers too, and you're well on the way to covering a major chunk of school expenses.
Every dollar you earn works against your ability to get student loans, Mr. Usher says, so there's a tradeoff. "But it's actually quite possible to put yourself through school with a fairly minimal work regime, if you're living at home," says Mr. Usher.
While the total bill for college or university might seem daunting, the right combination of scholarships, loans, grants, education savings plans, and part-time and summer work earnings by students can make the costs somewhat more manageable.